Warner Bros. Consolidates TV Production : Hollywood: Leslie Moonves, who had been president of Lorimar, will head the studio's new division.

Citing economic reasons, Warner Bros. has consolidated its two network TV production companies and released several top executives from their contracts.

The consolidation, which had been widely anticipated for more than a year, signals a major strategic shift for Hollywood's largest TV program producer. All executive, production, creative and business staffs will now be folded into one division.

The units being consolidated are Warner Bros. TV and Warner's Lorimar TV unit. Heading the new consolidated division, which will be known as Warner Bros. TV Production, is Leslie Moonves, who had been president of Lorimar. Moonves, 43, will oversee a staff of about 160 and a production budget of more than $200 million.

Harvey Shephard, the former CBS Entertainment programmer who became head of Warner Bros. TV seven years ago, will become an independent producer exclusive to Warner. He is being joined by Fran McConnell, who had been senior vice president of creative affairs.

News of the consolidation set off speculation that the studio was unhappy with the output of its Warner TV division under Shephard and that he lost a power struggle with Moonves, whose division has been Hollywood's top supplier of network TV programs.

But Warner officials denied those reports. "This is not about success or failure," said Barry Meyer, executive vice president of Warner Bros. "This is about efficiency and a radically changed marketplace."

Over the last few years, the networks have held down the prices they are willing to pay for studio-produced TV shows while the rerun profits such shows earn in syndication have dwindled. In addition, the networks are increasingly producing shows themselves, reducing their traditional dependence on studios as program suppliers.

The consolidation, which is initially expected to save the studio $8 million a year in overhead and administrative costs, will result in an unspecified number of layoffs.